TO: COMMUNITY AND
ECONOMIC DEVELOPMENT
COMMITTEE
FROM: Jen Baker
SUBJECT: Team San Jose Semi-Annual
Status Report
DATE: October 14, 2016
Approved Date:
10/15/26
RECOMMENDATION
Accept the semi-annual status report on the performance and activities of Team San Jose.
BACKGROUND
Team San Jose (TSJ) is an innovative nonprofit organization unifying the San Jose Convention and Visitors Bureau , hotels, arts, labor, and venues to deliver a high-quality visitor experience. TSJ manages the San Jose McEnery Convention Center, Parkside Hall, and South Hall, as well as theater venues including the California Theatre, Center for the Performing Arts, Montgomery Theater, and the San Jose Civic Auditorium. Per the municipal code, the City provides 4.5% of the collected 10% Transient Occupancy Tax (TOT) to TSJ to operate the convention and cultural facilities venues and manage the Convention and Visitors Bureau. The TOT is collected from visitors to San José hotels.
On June 18, 2024, City Council approved amendments to the two agreements with Team San Jose to manage the City-owned convention center facilities and four theaters and operate as the Convention and Visitors Bureau. Both agreements are on the final five-year terms that expire on June 30, 2029.
ANALYSIS
Pursuant to the master agreement between the City and TSJ, semi-annual updates on TSJ’s performance on City Council-approved target measures are presented to the Community and Economic Development (CED) Committee. To support a greater understanding of TSJ’s strategies and activities, TSJ also presents on its sales and marketing activities. Also included in the status report are metrics that, while not part of CED COMMITTEE AGENDA: 10/26/26
ITEM: (d)1
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 14, 2026
Subject: Team San Jose Semi-Annual Update
TSJ’s performance, provide insight into industry trends and the local environment. The presentation will focus on TSJ’s unaudited performance in FY 2025-2026, including its major sales and marketing strategies for FY 2026-2027.
June Budget Message for FY 2026-2027
To better evaluate TSJ’s performance, the City Council-approved Mayor’s June Budget Message for FY 2026-2027 directed the City Manager to include a supplemental performance framework as part of the October 2026 Semi-Annual Status Report to the CED Committee. With the goal of helping City Council understand TSJ’s performance and whether the City’s facilities are operating to their full capacity and market potential, the Mayor’s June Budget Message directed the framework to:
• Include facility-level and peer-city benchmarking, including but not limited to revenue per seat per year, tickets sold or attendance, utilization by venue, revenue by venue, cost recovery, and comparisons to peer convention and theater facilities;
• Capture induced economic impact—including TOT, estimated visitor spending, and regional economic output—so the City Council can evaluate return on investment at the community level, not solely at the facility level; and • Identify the specific peer facilities and markets used, and account for structural differences—market size, hotel room inventory, air service, and climate—that materially affect competitiveness independent of operator performance.
Staff has collaborated with TSJ in moving towards a better understanding of TSJ’s performance relative to peer destinations. Initial analysis draws on TSJ’s hotel performance benchmarking data, findings from CSL Consulting’s strategic plan update for the San Jose McEnery Convention Center, and TSJ’s strategic planning activities.
The following initial findings and data will help inform the Request for Information process that staff will complete by June 2027:
Hotel Landscape
Within the 13 cities tracked for hotel performance by TSJ, the Bay Area has lagged in recovery levels compared to other parts of the state and country. Lagging international markets from East Asia and a low return-to-office rate have led to decreases in two key feeder markets.
Locally, these changes have been compounded by significant changes to hotel inventory. Overall, San José has more hotel inventory than pre-pandemic as many hotels came online during 2020 - 2021. However, the conversion of the Signia Tower to student housing caused the downtown inventory to decrease by 14%. The combined effect is fewer available rooms for conventions and high-value travelers with increased inventory impeding recovery compression. While San José’s total rooms sold are now at pre-pandemic levels, increased inventory and changed distribution of hotel
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 14, 2026
Subject: Team San Jose Semi-Annual Update
product across classes mean occupancy, revenue, and revenue per available room (RevPAR) still lag. Tourism Economics forecasts that overall hotel revenue will reach pre-pandemic levels in 2029-2030. TSJ is expecting to reach the pre-pandemic level of group rooms by 2030, aligned with the recovery path for San Francisco Travel.
San Jose McEnery Convention Center
The City and TSJ engaged with CSL Consulting to provide a comprehensive strategic plan for the future development needs of the San Jose McEnery Convention Center. As part of the study peer benchmarking, CSL found TSJ produced the highest revenue per sellable square foot, although lower levels of exhibit space and available downtown hotel inventory for assembling group blocks limit the capture of sampled markets (40% capture based on hotel inventory).
Theaters
TSJ-operated theaters have surpassed pre-pandemic levels for performances and overall attendance. Event volume at the San Jose Civic has recovered and surpassed pre-pandemic levels and compares favorably to other like-sized venues.
Team San Jose Three-Year Strategic Plan
TSJ staff and the board have been engaged to develop TSJ’s new three-year strategic plan. As part of the effort, they executed research activities across four months, including a resident survey (with a representative sample), individual interviews, listening sessions, and a crosswalk analysis of City and regional plans. The research revealed six overarching themes:
1. Stakeholders want a new, distinct brand;
2. Convention center and hotel capacity are structural constraints;
3. Relationships with City leadership, stakeholders, and the public could be strengthened;
4. Leisure tourism, young travelers, and downtown vibrancy remain key opportunities;
5. Funding has not kept pace with TSJ’s expanding scope; and
6. Theaters and arts partners are a civic strength with facility and capacity needs.
These themes will inform the direction of the strategic plan, supplemental benchmarking, and the development of new performance KPIs. TSJ staff will brief the Mayor and City Council on the draft strategic plan in fall 2026, with the final document expected to be completed and approved by the TSJ board by the end of the calendar year.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 14, 2026
Subject: Team San Jose Semi-Annual Update
Highlights of FY 2025-2026 Performance and Activities
As outlined in Attachment A, the TSJ Semi-Annual Update to CED Committee, TSJ and the City collaborated to develop City Council-approved performance targets for FY 2025-2026 informed by national industry trends and local indicators, which also inform TSJ’s sales and marketing strategies. TSJ has sought diversification of new business for the convention center while maintaining high standards of service to retain current repeat clients. TSJ surpassed all of its performance targets for FY 2025-2026.
With a strong string of major technology conferences and major events in 2026, TSJ reports positive growth in hotel occupancy, average daily rate, and revenue per available room driven by visitors.
As outlined in Attachment A, much of the success of the 2026 major events was the direct result of a coordinated, multi-partner destination marketing strategy focused on the regional major sporting events.
TSJ is also enhancing its outreach to the business community to ensure better cohesion in the visitor experience and to maximize local businesses’ economic impact from both overnight guests and local/ regional visitors to TSJ-managed facilities downtown. This was accomplished through the launch of the Bi-Annual Summits for Hospitality and the creation of industry pages on the sanjose.org website. Building upon last year’s two BiAnnual Summits for Hospitality, which helped mobilize local business support for the 2026 major events, the upcoming summit on November 12, 2026, will focus on helping hospitality businesses strengthen their online presence in an evolving digital landscape shaped by AI tools. The summit will also highlight the busy calendar of upcoming events at TSJ-managed facilities.
Key Highlights of FY 2025-2026:
• Year-end performance measures ended above targets in all measures. TSJ has a significant positive variance again in Gross Operating Results mainly due to the cancellation of a large tech event (cancellation fees move directly to the bottom line with no associated labor expenses). Increases in several larger conferences spending over budget and short-term bookings related to the SJ 2026 events helped to drive increased revenues.
• TSJ saw significant increases in attendance and spending in the convention center year-over-year. Sales have been robust with significant increases in citywide business booking. The increase is a mix of signing repeat customers and securing new programs for the City.
• Theater attendance and occupancy grew year-over-year. TSJ-managed theaters hosted a total of 608 performances, drawing nearly 579,000 attendees, a 12% increase year-over-year.
• Hotel performance showed marked increases year-over-year thanks to the 2026 major events and increased convention center activity.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 14, 2026
Subject: Team San Jose Semi-Annual Update
• Two Bi-Annual Summit for Hospitality events welcomed a total of 390 attendees (a 74% increase over the previous year). The Industry Impact list grew from 500 subscribers to 933 (an increase of 87% over the previous year). • TSJ partnered with the City Manager’s Office of Economic Development and Cultural Affairs to optimize opportunities for destination visitors anticipated in 2026 and estimate the economic impact from the major sports events. In partnership with Visit San Jose, the City Manager’s Office of Economic Development and Cultural Affairs invested $150,000 in the Arts Will Play in 2026! Cultural Tourism Marketing Opportunity. While still midway through the annual campaign, early indicators demonstrate a strong result in brand awareness and cultural organizations’ attendance (see Attachment A). This digital marketing campaign promotes cultural tourism in 2026 through a diverse set of events and programs that uniquely reflect San José’s culture. Selected through a competitive proposal process, organizations received $10,000 in digital marketing ad buys plus a customized digital marketing strategy developed in partnership with Visit San Jose. The plans drove a total of 11.2 million media impressions to the participating organizations.
Marketing and Sales Strategies for FY 2026-2027
In addition to the performance metrics and new benchmarking data, TSJ will present to the CED Committee marketing and sales strategies for the new fiscal year, including industry trends, the tourism and travel economy, and TSJ’s contribution to the overall hotel economy as outlined in Attachment A.
TSJ, operating its Convention and Visitors Bureau as “Visit San Jose,” seeks to diversify its market segmentation for sales and is executing a robust customer engagement plan via industry trade shows and events, and continues to build business to the San Jose McEnery Convention Center. The marketing team continues a strategy of utilizing advertising technology to target consumers and meeting planners and convert travel to San José hotels and the airport, while building the target market for the sales team. The public relations team gains ongoing exposure for San José as a destination in national and international outlets. Furthermore, as added to the Visit San Jose contractual scope of work in the City/TSJ master agreement, TSJ leads a collaborative marketing group focused on a unified destination branding and marketing of San José to local, regional, and national audiences.
Key Strategies for FY 2026-2027:
• Continue to drive new sales through increased diversification of markets and building relationships through a targeted trade show and event schedule. The team will execute 63 events, more than ever before;
• Leverage AI in paid media for targeting both direct-to-consumer and meetings marketing efforts;
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 14, 2026
Subject: Team San Jose Semi-Annual Update
• Focus marketing efforts on heritage cooking as a storytelling strategy for the destination, leveraging with New York media mission and partnerships with Visit California;
• Utilize the 100th Anniversary of the California Theatre to highlight SoFA and the theaters. Extend activations for the anniversary into the City’s 250th Anniversary celebrations.
Considerations for Setting TSJ Performance Targets
Attachment B, Considerations for Setting TSJ Performance Targets, was created by the City Manager’s Budget Office. It contextualizes the variables and considerations in developing annual performance targets for TSJ. The performance targets are presented to the City Council for approval as part of the annual Proposed Operating Budget process through a Manager Budget Addendum incorporated into the Mayor’s June Budget Message. For context, TSJ performance targets should represent feasible markers of excellent performance within expected market conditions. Most performance targets impact the allocation of budgetary resources within the Convention and Cultural Affairs Fund to support facility operations. Overly aggressive performance targets would negatively impact the fund if not met.
TSJ will discuss highlights of the attached presentation at the CED Committee meeting.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office.
JEN BAKER
Director of the City Manager’s Office of
Economic Development and Cultural
Affairs
For questions, contact Kerry Adams Hapner, Director of Cultural Affairs, City Manager’s Office of Economic Development and Cultural Affairs at kerry.adams[email protected].
ATTACHMENTS:
Attachment A: TSJ Semi-Annual Update to CED Committee October 26, 2026 Attachment B: Considerations for Setting TSJ Performance Targets